When do Agricultural Exports Help the Rural Poor? A Political-Economy Approach

Agricultural exports have been touted by a number of economists as having important potential to alleviate rural poverty, and poverty more generally since much of it is rural, in developing countries. The logic of this view lies in the ideas that (a) many agricultural export products are relatively labour intensive in production and that in many countries the until-recently-prevailing import substitution strategies have penalized agriculture. Moving to a freer trade regime removes the implicit tax on the sector and should loose its growth potential with resulting benefits for workers and small holders. This view, plausible enough from one perspective, flies in the face of much historical evidence that as new agricultural exports become an option, peasant groups are pushed off the lands they previously operated so that large-scale farmers can dedicate it to export use. This process has yielded much conflict and violence, and rather than helping the rural poor has often made them worse off. Predicting whether agricultural exports will help the rural poor thus involves judging whether the reality in a given situation is closer to the first cited model or to the second one. At present fruit and vegetable exports offer hope of strong employment creation in a number of developing countries, though total trade figures suggest that these products cannot by themselves pull up the rural poor in larger developing countries.